Global Polypropylene Demand is Driven by Packaging and Automotive Industries

05 Nov 2010 • by Natalie Aster

“The recession had a negligible effect on the demand for polypropylene by the packaging industry because the majority used is in the packaging of food materials and the consumption of food is not affected by recessions as other industries are. The automotive industry suffered a huge decline in demand due to the recession, but with the global economy recovering, the demand from the automotive sector is expected to recover also, boosting the demand for polypropylene.“

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Report Sample Abstract:

Propylene Supply Shortage will Hinder the Growth of the Polypropylene Industry

The global polypropylene demand in the year 2009 was 36.5 million tons with the packaging industry holding the largest share of 54% followed by the automotive industry with a share of 15.6%.

The density of polypropylene is low, making it a suitable material for these applications. When used in the automotive industry, it reduces the weight of the vehicles improving the fuel efficiency and costs are also significantly reduced.

The amount of propylene produced depends on the type of feedstock used, for example when light feedstock (natural gas) is used, a relatively small amount of propylene is produced. However, when a heavy feedstock (crude oil) is used, a comparatively significant amount of propylene is produced. Due to recent growth in the demand for ethylene derivatives, the industry is shifting more towards lighter feedstock. This demand is more prevalent in the Middle East and North America as ethylene and its derivatives produced from lighter feedstock are cheaper and more profitable but the amount of propylene produced is lower. Variations in the supply of propylene affects the prices of both propylene and polypropylene, therefore, propylene supply shortages can prove to be a major hindrance to the growth of the polypropylene industry.